(RTTNews) - The New Zealand stock market closed sharply higher on Monday ahead of an expected large interest rate cut by the Reserve Bank of New Zealand this week. The central bank is expected to cut the official cash rate by as much as 100 basis points on Thursday, according to economists. The market opened sharply higher despite a weak lead from Wall Street and extended its gains for the second consecutive trading session. The benchmark NZX 50 index closed up 81.16 points, or 2.89%, at 2,889.92.

In the currency market, the New Zealand dollar fell against the dollar ahead of inflation data and a hefty cut in official interest rates. Economists expect the inflation rate to hits higher level in 18 years. The kiwi finished the local session at US$0.6120, down from US$0.6155 in early trade and US$0.6181 late Friday.

U.S. stocks closed lower on Friday in another extremely volatile trading session as traders weighed some weaker than expected economic data against better than expected earnings from some big name companies. On Friday, the Dow Jones industrial average fell 1.4% to 8,852, the broader Standard & Poor’s 500 Index dropped 0.6% to 940, and the Nasdaq Composite Index slipped 0.4% to 1,711.

Oil prices rose for a second day Monday on expectation of a production cut by OPEC. At 00:38 a.m. ET, oil was quoted at $73.79 a barrel, up $1.94. Light sweet crude for November delivery closed at US$71.15 on the New York Mercantile Exchange, up US$1.30 for the session, on Friday.

On the economic front, Statistics New Zealand reported Monday that the value of credit and debit card spending in New Zealand increased by a seasonally adjusted 0.8% in September compared to August, driven largely by non-retail industries. Retail transactions were flat. The core retail sales, which excludes motor vehicle related transactions, was down 0.4% in September following a 1.6% increase in August.

Meanwhile, businesses in New Zealand’s services sector reported reduced activity for the third straight month in September, according to the latest Performance of Services Index reading. The Bank of New Zealand/Business New Zealand survey showed a drop of 1.0 point to an index reading of 46.9, with readings below 50.0 indicating contraction in the measured sector. It marked the second lowest reading for the index since the series began in April 2007.

Top stock Telecom surged up 6.8%, Contact Energy advanced 3.4%, and Fletcher Building gained 3.9%. Other gainers included, Fisher and Paykel Healthcare 5.0%, SkyCity 5.4%, Mainfreight rose 5.6%, Infratil 2.0%, Trustpower 2.9%, and Auckland Airport 4.6%.

Among losers, Freightways slipped 0.3%, Fisher and Paykel Appliances declined 1.5% and Port of Tauranga lost 2.3%.

The Warehouse closed unchanged amid speculation that Australia’s top grocer Woolworths would proceed with a takeover bid. Goodman Property Trust rose 0.9% after the company announced the sale of two buildings in Parnell.

Pike River Coal jumped 5.2% after the company reported Friday that it had struck coal at its West Coast mine after two years of tunneling. Steel & Tube slumped 21.7% after OneSteel pulled its bid on Friday. Steel & Tube said Monday that its quarterly profit was up on last year.

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Posted in Categories: Australia, Economy, New Zealand, Releases, USA.

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